There has been much talk about the middle class, wage stagnation and the issues that current state of both causes for our society. I have posted several times about the long-term actions that are necessary to address these problems. In this post, I want to talk about some things that we can do today to make a difference.
To do this, I am going to go back better than 10 years and remember conversations that Pat Allin and I had when we were in the process of founding Textura. Those conversations revolved around what we wanted the company to be. Pat was adamant that culture matters and that the success of a company depends on the people who work there.
This implied that the employees, like the shareholders are important stakeholders in the organization and must be treated well if you expect to attract and retain the best and brightest. And attracting and retaining quality people is key if you buy into the notion (and we did) that the employees make a difference when it comes to the success of the company.
So, it was a short step to several people related operating principles:
- Hire only the best (capacity and training), highly motivated people;
- Treat them with respect;
- Pay them a fair wage;
- Invest (both on the job and with formal education) in them over time.
These principles were driven by a business model that recognized that we would not be able to achieve the success we were looking for without people who were fully bought into making Textura succeed.
Let me state this in another way.
There is obviously more to a successful business than this equation would indicate, but it is most definitely one of the pillars that supports success.
Companies like Starbucks, PwC and Google understand this and along with good management practices, good product and a long-term vision, they pay higher wages and invest in their employees because it is very good for business. It makes them more competitive and generally helps them to achieve their short and long-term growth and profitability goals.
So, US-based businesses can make all of the excuses that they want about overregulation and taxes, but understanding and buying into the equation that is pictured above will do more for their long term competitiveness and profitability than spending inordinate amounts of energy obsessing about government interference in their business.*
The beauty of implementing the operating principles outlined above is that it has both short and long term impacts by addressing wage stagnation an issue with serious social and economic impacts. And, in the long term (along with other good management practices) it improves a company’s competitiveness and the competitiveness of the US on the world stage.
*Editorial Comment: This isn’t to say that there are areas where over regulation isn’t an issue, it also isn’t to say that there are regulations that are necessary, but that is another post.
Copyright 2017 Howard Niden